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Penny Stock DD

Education

Three factors matter most when it comes to determining when you will become a millionaire. They are:

  • The amount of money you can invest,
  • The length of time you can invest that money, and
  • The rate of return you earn on that money.

While it may be a case of stating the obvious, the more you can sock away for a longer period of time at a higher rate of return, the easier it will be for you to become a millionaire.

If you’re like most of us, though, you don’t have thousands of extra dollars lying around every month to invest for your future. While that’s OK, just understand that the tradeoff you’ll face is between time, money, and financial risks while striving for those higher potential returns.

(Read the Rest of the Article…)

Happy trading,

Curt

When value-seeking investors stock up on bargain stocks, things can turn out one of two ways. Best-case scenario, these inexpensive investments take flight, and produce gains for their buyers. But sometimes, cheaply-had holdings are just plain cheap and never manage to pick up the hoped-for momentum. Instead, they continue to depreciate, and their outlook just keeps getting gloomier.

In value investing, it’s a risk that comes with the territory. These so-called “value traps” aren’t stars in disguise — as Merrill Lynch & Co. strategist Savita Subramanian puts it, they’re “cheap for a reason.”

Read the complete article here.

Happy trading,

Curt

It’s been nearly six months since the S&P 500 began its precipitous rise, and we have yet to even endure a 5% correction in that time. It might seem as if I’m regularly jumping on the bearish bandwagon, crying “wolf” when nothing seems wrong. But the stock market won’t rise forever, and a correction looks inevitable. Therefore, it pays to think ahead. Consider putting a few strategies in motion to protect your portfolio when a market downturn does occur.

Below, I’ve outlined five approaches that might help you weather the storm. Not every situation works for every individual, but chances are good that at least one of these strategies may make sense to you.

Read the complete article here.

Happy trading,

Curt

t’s nice to have a go-to place for consistently finding undervalued stocks. I’ve found mine.

Spinoffs. They are loathed, sold off by investors, and most importantly they are often undervalued. I love the smell of spinoffs in the morning. Anytime, in fact. And you should, too, if you like making money in the market.

Let me tell you how I stalked an undervalued Frontier Communications (NYSE: FTR), following a recent transaction with Verizon (NYSE: VZ), and knew exactly when to buy. Then I’ll give you a free idea that I’m watching now, with no obligation.

The secret hiding spot
The field of special situations can be a happy hunting ground. As Joel Greenblatt details in his book You Can Be a Stock Market Genius, special-situation investing led him to 50% annualized returns for a decade. That type of return transforms a $1 investment into $52 in just 10 years.

(Read the Rest of the Article…)

Happy trading,

Curt

Having seen his fund return nearly 20 percent last year and over 5 percent in January, Pedro de Noronha, managing partner at Noster Capital in London, is getting a little nervous that a bubble created by central banks’ loose monetary policy might burst.

“If we are indeed witnessing the third liquidity-induced bubble in a little over ten years (this time fuelled by public, not private sector debt), we are fearful that there could be severe consequences for the market over the medium term,” de Noronha said.

Read the complete article here.

Happy trading,

Curt

There’s a frenzy of stock buying going on now, because no one wants to be left out of the stock market recovery.

To some extent, this enthusiasm is warranted. The long-term data fully support investing in stocks. From 1926 through 2010, the average annualized return of the U.S. stock market has been almost 10%.

However, it’s short-term data that’s fueling the current rush into stocks. The rapid recovery of the stock market has put most “buy and hold” investors back in the black, granting them a full recovery from the market crash that began in 2008. So much for those who claimed that buy and hold was dead.

Read the complete article here.

Happy trading,

Curt

If, like me, you’re looking for more than index-like returns, you know that Buffett-esque success depends on navigating the market’s ongoing fear-to-greed continuum. Luckily for us, few corners of the market invoke more unnecessary fear and blind greed than the perceived dark alley of penny stocks.

WARNING! If the idea of investing in a penny stock scares you to death, makes your stomach turn, or causes you to wet the bed, please, please, please, stop reading this right now.

I offer this warning because it’s true; the novice investor should never, ever invest in a penny stock, period. However, if you are among those whom Benjamin Graham called an “enterprising investor,” able to discern share price from the true value of an enterprise, let’s talk.

(Read the Rest of the Article…)

Happy trading,

Curt

Last week in my Back to the Basics column, I reviewed two ways to find investment ideas: examining the goods and services that you come in contact with all the time, and becoming an avid reader.

But another way to track down stocks has opened up to individual investors, thanks to the magic of the internet. It can be both quicker and easier than the two methods I talked about last week, but it also comes with pitfalls of its own. I’m talking about using stock screeners.

Read the complete article here.

Happy trading,

Curt

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Read more on The Internet Impact at Wikinvest

It wasn’t that long ago that many saw the U.S. dollar as the safest currency in the world. Now, though, a combination of factors has raised questions about whether the global financial system would be better off with an alternative to the dollar as the world’s dominant reserve currency. Regardless of whether foreign governments and policy-making bodies succeed in establishing a new reserve currency system, you can take steps to shore up your own portfolio against the potential havoc a falling dollar could wreak.

The arguments against the dollar
The latest salvo in the debate about whether the dollar should be replaced by a new reserve currency came from the International Monetary Fund this week. Yesterday, an IMF report argued that a specialized financial instrument it uses called Special Drawing Rights could help stabilize the currency system.

Read the complete article here.

Happy trading,

Curt

Investing for Impact

February 14, 2011

After years of mockery and marginalization, socially responsible investing has started getting some well-deserved credit as a viable investing strategy. Even the big money has recently begun to back this more benevolent approach. But simply making money may not be enough for a new breed of investors. They’re seeking even more aggressive ways to create positive change in the world through the power of their investments.

When dollars make a difference
Imagine if your next donation to charity also yielded an investment-like return. That’s the core concept behind “impact investing,” which directs dollars into investments that generate profits while specifically working to address social and environmental problems. That diverges a bit from socially responsible investing, which often simply involves avoiding stocks perceived as harmful to the broader world.

Read the complete article here.

Happy trading,

Curt

I have a problem. It’s certainly not the worst problem; in fact, just the opposite. One of my stocks has risen significantly since I bought it — beyond any reasonable expectation of return. So what do you do in this situation? It may be a good problem to have, but that doesn’t make it any easier to solve.

ARM Holdings (Nasdaq: ARMH) reported fourth-quarter and full year results last week, easily surpassing analyst expectations and sending ARM rocketing skyward once again. This has been a common theme in the year and a half I’ve owned the stock. But every time it happens, the same thoughts run through my head: Maybe this is the time to lock in those profits. Don’t get me wrong — a run up in a stock is not a reason to sell by itself. And ARM is a fantastic company with an innovative business model that offers advantages over a typical semiconductor company. But when I look at valuation, it can be difficult to justify.

Read the complete article here.

Happy trading,

Curt

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Why Investors "Sell in May and Go Away"
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